U.S. Trade Gap Hits $60 Billion

The U.S. trade deficit with the rest of the world rose in May to $60 billion, from $58.7 billion the prior month, with higher oil imports a key factor, the Commerce Department said July 12.

Despite the modest improvement, the deficit reflects what some call a major imbalance in the global economy. The high level of imports has led to massive currency reserves in countries like China, and has weighed on the dollar.

Imports in May reached a record $192 billion, while exports also set a record at $132 billion . Americans exported more capital goods, industrial supplies and consumer goods, but imported more industrial supplies, consumer goods and food products.

The trade in goods deficit stood at $69 billion, while trade in services had a surplus of $9 billion .

The trade deficit in oil products climbed to $23.9 billion from $22.4 billion in April. However, it was lower than the $25.4 billion gap recorded in May 2006.

For the full year 2006, the trade deficit totaled $758.5 billion. If the current trade trend persists, the U.S. for the first time in six years, would see the deficit shrink in 2007.

The trade gap with China climbed to $20 billion, a gain of 3.3% from April. Imports from China climbed 4.6% to $25.3 billion and exports rose 9.8% to $5.3 billion.